In his column in yesterday’s Ipswich Star David Ellesmere raises the collapse of Jessops, HMV and Blockbuster, three High Street names, in the last week. He attributes this to the state of the economy, which is de rigueur from the Labour PPC. He also attributes it to competition from internet based businesses, aligned with those who are registered in tax havens to minimise any tax liability.
In this Mr Ellesmere is absolutely right. It is self evident that any business that doesn’t pay tax will have an advantage over those that do. It is self evident that any business that doesn’t pay rent or rates will have an advantage over those that do. Internet sales have undercut the business model that made HMV and Blockbuster successful for many years. Jessops business model has been undermined by advances in technology and increased competition from supermarkets; digital cameras can be bought increasingly cheaply either online or from a supermarket, and without the need to develop photographs, why would you need a specialist store?
Last year John Lewis’s managing director, Andy Street, called on the Treasury to demand tax is paid in the country where profits are made: Amazon made £3.3bn in sales but paid zero UK corporation tax on any of the profits of that income. “They will out-invest and ultimately out-trade us,” tax-paying John Lewis protests, unable to compete fairly with tax-shirkers. This should be easy to fix.
Walking through Ipswich town centre is pretty depressing this January. With some honourable exceptions, like the revamped Clinton’s store, itself a restructured company taken over by its creditors, the town centre is beginning to look down at heel. The proposals put forward by Sir Stuart Rose last year have fallen by the wayside in favour of doing nothing. Paul Clement, from the business funded Ipswich Central, reveals that the amount of money spent by retailers in the town centre fell by 2.9 per cent during November and December compared with the same period in 2011.
Whilst Mr Ellesmere is absolutely right to say “we might individually get good deals in the short term but in the long term, tax dodging by international companies will impoverish us all,” he offers no solutions here. Indeed he accepts that it is difficult to turn things around. “I don’t think we can stop this trend and, given that so many people are strapped for cash, I wouldn’t be the one to tell them to forsake cheap online deals.”
More must be done by the Government to ensure that companies like Amazon pay tax on profits made in this country. But equally more must be done by local Government to improve demand for stores here in Ipswich town centre. Moving the market may have proven too controversial for the Borough Council, but improving the way the town centre looks is equally important.
Similarly the County Council needs to look to see what it can usefully do. Reopening the Park & Ride site at Bury Road, and speeding up the roadworks as part of the Travel Ipswich project, could do much for the town.
Filed under: Ipswich Borough Council Tagged: | Amazon, Blockbusters, Campaign Activity, Clinton's, David Ellesmere, Economy, Government, HMV, Ipswich Central, Jessops, On line presence, Paul Clement, Sir Stuart Rose, Tax Avoidance